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C & D

KiwiSaver – Are You Getting the Right Advice?

30 May 2017

KiwiSaver Schemes are a long-term investment. A forty-year-old will, with all things being equal, be in a KiwiSaver fund until they turn sixty-five. For most people, their KiwiSaver contributions go indirectly to their KiwiSaver provider via the IRD with their employer’s regular monthly or two weekly deductions which include PAYE, the employer’s contribution, the employee’s contribution, child maintenance payments and any other deductions. Effectively it is a “painless” way to invest.

So being in a KiwiSaver Scheme is an easy and affordable way to save for your retirement. However, to get the best out of it, you should seek advice. There are really three “advice options”.

No advice:  You will only receive general information. The sales representative will be able to answer any general questions you have and provide some information about the scheme. They cannot legally give you any advice.  You will need to form your own opinion about whether KiwiSaver is right for you and which scheme and type of fund to invest in.

Class Advice: You will only receive generic advice. The sales representative will be able to advise you about what is usually suitable for people in your group or “class”. They cannot give you advice about your own individual needs and their advice won’t consider your personal situation. You can use the generic advice to form your own opinion. Any entity or individual registered to provide a financial adviser service can provide class advice.

Personal Advice: You will receive advice tailored to your personal circumstances. The adviser can help you with the decision process on whether you should get into KiwiSaver, and if so, whether the KiwiSaver scheme(s) they represent is suitable for you and which fund is best. As you will be receiving personalised financial advice you can expect that the adviser has considered your personal situation and your investment goals. An Authorised Financial Adviser (AFA), or an employee of a Qualifying Financial Entity (QFE) advising on their company’s own KiwiSaver scheme can provide personal advice.

There are two key questions that you should ask your adviser or sales representative. Firstly, how many different KiwiSaver schemes he or she sells. Second, if you are already in a KiwiSaver Scheme, whether he or she can compare the scheme being offered to the scheme you are already in.

Given that KiwiSaver is such a long-term investment savings scheme, and could contribute significantly with the funding of your retirement, we believe that it would be prudent to consult with a well-qualified Authorised Financial Adviser, regardless of whether you are considering joining KiwiSaver, or if you are already a KiwiSaver member. Remember, that the adviser is legally required to act in your best interests, which may or not be in their best interests.


Steven Barton (FSP 32663) and Susan Pascoe Barton (FSP 32382) are Certified Financial Planners and Authorised Financial Advisers.  Their initial disclosure statements are available free of charge by contacting them on (07) 3060080 or they can be downloaded from www.pascoebarton.co.nz. This column is general in nature and should not be regarded as personalised investment advice.